Insite

Quarterly Real Estate Analysis for BANGALORE

October-December 2015

Price Trends
Growth Drivers
Supply Analysis

Bangalore

INTRODUCTION

Capital Growth

The 99acres.com Bangalore Insite report brings to you

major movements in the real estate market of the city,
in Oct-Nov-Dec 2015 as compared to Jul-Aug-Sep 2015.
The report not only captures the significant trends across
various localities in Bangalore, but also brings to you
the analysis and the insights that will make this report
valuable for investors and end users. The report also
includes an in-depth supply analysis to enable sellers
and buyers determine the direction of the market.

Content
City-Highlights:

06

Price Trend Analysis:

East and South Zone

07

North, West and Central Zone

12

Supply Analysis:

14

-1%

City Insite Report

Methodology
We have reported quarterly price movement of capital and
rental values measured in per square feet for the analysis
of Bangalores residential market. Effort has been made
to provide comparable and accurate city level data, since
prices and rents are floating and at any point may vary
from the actual numbers.

99acres Insite

Oct-Dec 2015

Bangalore North
-1%

Bangalore Central

Bangalore West

-2%

0%

Bangalore East
-1%

Bangalore South
-1%

Falling sales volume force developers to

ask prices

SLASH

Realty Round-up
Capital
Values

Rental
Values

Delhi NCR

Delhi NCR

Mumbai
Kolkata

Bangalore
Chennai

Mumbai
Pune

Pune
Hyderabad

Hyderabad
Chennai

Kolkata

Bangalore

* Capital values represent quarterly change

* Rental values represent yearly change
* Supply is basis properties listed on 99acres.com

99acres Insite

Supply

East and South Bangalore

BANGALORE

Capital Analysis

City Highlights
The residential real estate market in Bangalore is gradually moving towards the price correction mode.
After a consistent drop in the growth of average quarterly capital prices during the first three quarters
of the year, the city finally recorded a negative price movement in Oct-Dec 2015.

Top Performers in East and South Bangalore (Capital Values)

Major projects like the Chennai-Bengaluru Industrial

Corridor, Namma Metro and the development of road
infrastructure in the city promised brighter days ahead.

Jan-Mar15

1%
Apr-Jun15

While the market continued to be plagued with inflated

property prices and oversupply of housing units in the
luxury and high-income housing segments, there were
some mood lifters like increased Private Equity (PE) and
Foreign Direct Investments (FDI).
Though the citys residents aggrieved over the poor state
of existing civic infrastructure, the governments focus on
future development at the city level continued to play a
balancing factor for Bangalores realty market.

Chandapura

Kundalahalli

The first half of 2015 generated some hopes and the

residential property market recorded a growth of over two
per cent in average capital prices. However, the second half
witnessed capital rates dropping by a per cent, indicating a
market headed for price correction.

Q-o-Q Price Index

Despite thriving on housing demand generated by the

IT/ITeS industry, property prices in Bangalore recorded
no change and remained stagnant in the last one year.

Jul-Sep15

-1%

HBR Layout

Construction of the long delayed Phase II of Namma Metro

commenced at two places after years of contemplation.

France allocates
200 mn euros for
expansion of the
Metro

Oct-Dec15

In December 2015, the Karnataka Government

approved a budget of Rs 1,200 crore for the
development of roads throughout the city. The work
on this project is expected to start in January 2016.

Invitation of 5,000
applications for
Bangalore Development
Authority sites near
Kengeri

8%

3%

A spike in hiring activity in the last one year, the

subsequent influx of migrants in the city along with
the fast-paced growth of start-ups impacted the
rental market in the city positively.

Home owners refused to lower the ask rates in the

rental space despite crummy infrastructure and
oversupply of housing units along the entire eastern
and southern belt.

HBR Layout and Marathahalli emerged as the top

grossers in the said period and recorded an annual
growth of 13 per cent each in the rental rates. Well-built
social infrastructure attracted the tenant community
to these localities.

Brookefield and Mahadevpura in East Bangalore

recorded an annual rental appreciation of six per cent
each in the last one year, despite civic woes. While a
2BHK in Brookefield commands a rent of around
Rs 17,000 per month, the same in Mahadevpura can
be rented out for Rs 15,000 per month.

Proximity to Namma Metro drove the rental markets

of localities such as Indira Nagar and CV Raman Nagar,
where average rental rates appreciated by five per cent
each in the last one year.

Old Madras Road, Kanakapura Road, Begur Road and

Electronic City saw the rental values declining by
seven to eight per cent in the last one year.

Gollahalli

4%

6%

4%

5%

Attibele

Inundated by an oversupply of housing units, both East

and South Bangalore saw capital rates dipping marginally
in the current quarter.

Affordability drew home buyers to the fringes of East

and South Bangalore. This was evident as Gollahalli and
Hoskote in the East and Attibele and Chandapura in the
South recorded upward price movement to the tune of
three to eight per cent in Oct-Dec 2015.

HSR Layout, Singasandra and Kudlu Gate in South

witnessed slight growth in values (one to three per cent)
in the last quarter of 2015. This may be attributed to the
change in the trash-dump policy, wherein, instead of 500
tonnes daily, only 60 tonnes is now dumped in these areas.

Central Government gives

in-principal approval to
acquire land for widening
Bangalore-Mysore Highway

4%

Banashankari

99acres Insite

3%

3%

5%

0%

KEY INFLUENCERS
Inauguration of Namma
Metro between Magadi
Road and Mysore Road

ITPL

2%

This cheered the realty industry with impedning hopes

for the residential zones along the metro corridor.

East and South Bangalore recorded a mere one per cent

growth in the average rental values between
Oct-Dec 2014 and 2015.

Hoskote

*The graph represents Q-o-Q change in average capital values in Bangalore

A portion of the Reach II under Phase I of Namma Metro,

which covers a stretch of 6.8 km between Magadi Road
and Mysore Road, was inaugurated in November 2015.
The remaining stretch up to Majestic is expected to get
operational by June 2016.

HSR Layout
Babusapalaya

Rental Analysis

Top Performers in East and South Bangalore (Rental Values)

Localities along the Outer Ring Road (East) continued to

record declining sales volume and dipping capital values.
After a 10 per cent drop in Jul-Sep 2015, prices toppled
again by around five per cent in the current quarter.
Varthur Road, Panathur and Ramamurthy Nagar were the
worst impacted by the diminishing housing demand.

Indira Nagar
Bellandur
Sarjapur Road

5%
6%

13%

6%

HBR Layout
JP Nagar

Poor state of infrastructure and fast developing dumping

yards at various patches are the major reasons behind the
weakening housing demand near ORR. There were mass
demonstrations by the residents demanding pothole-free
roads, sidewalks and skywalks for pedestrians.

Harlur

6%

13%

6%

Marathahalli
BTM Layout

Sarjapur Road, which also recorded a quarter-on-quarter

dip in property rates, is also suffering on account of
crumbling civic infrastructure.

6%

6%

Capital values in Whitefield and Electronic City recorded

marginal depreciation due to growing unsold inventory.

Mahadevpura
*Rental values represent yearly change

6%

North, West and Central Bangalore

Capital Analysis

Rental Analysis

Top Performers in North, West and Central Bangalore

(Capital Values)
Yelahanka
Richmond Road
Tumkur Road

2%

7%

2%

RT Nagar

3%

Thanisandra

Jalahalli

6%

3%

RMV
Extension

3%

Mysore Road

4%

4%

5%

Rajaji Nagar

Jakkur

Plagued by ineffective implementation of infrastructural

projects, capital values in North, West and Central
Bangalore fell marginally by a per cent in Oct-Dec 2015,
as against the previous quarter.

Revelations of illegal properties and dubious water

connections in prominent localities of North, West
and Central Bangalore dampened investor sentiments,
resulting in falling sales volume. After witnessing a slight
price correction in the previous quarters, residential
real estate market on Mysore Road raced ahead in the
last quarter of 2015. This could be attributed to the
governments proposal to convert the road into a six-lane
national highway. The area already enjoys connectivity by
the Namma Metro and is also touted to grow into a
large-scale industrial hub.

Thriving on the growing number of start-ups and

IT/ITeS companies, North, West and Central Bangalore
witnessed a bustling rental market. Although between
Oct-Dec 2014 and 2015, the overall growth in
rental values was limited to one per cent, more than
80 per cent localities either recorded a positive price
movement or maintained the same rental rates.
Kengeri out-performed all other localities with a
10 per cent surge in rental values in the last one year.
Affordability and connectivity continued driving rental
demand to this peripheral area.

Oversupply of housing units engulfed the residential landscape of Bangalore. Buyers and developers
shifted focus towards affordable properties. While this segment was the most absorbed in the city, lack of
infrastructure in the fringes afflicted sales.
Availability of Different Property Types

Towards the North, affordability drove tenants to

localities situated along the Bellary Road, especially
Jakkur and Sahakara Nagar. Rental values in these
areas propelled by seven to eight per cent between
Oct-Dec 2014 and 2015.
Delivery of several premium projects in Hennur gave a
thrust to the average rental rates by around seven per
cent in the said period.
Rental values on Lavelle Road grew on the back
of successful attempts made by Bruhat Bengaluru
Mahanagara Palike (BBMP) to clear the blackspots in
the neighbouring areas. Garbage dump yards have
been a major spoiler for the rental market of several
localities in the city.
Malleshwaram too got rid of about 13 such blackspots.
Though the locality did not record a positive price
movement, it remained undeterred by the oversupply
of housing units.

Vasanth Nagar
Richmond Town
Ulsoor

Thanisandra in North Bangalore recorded limited sales

in the current quarter, however, it boasted of a healthy
investment potential backed by the development of Tech
Park in Bharatiya City. Capital rates here grew by three per
cent in Oct-Dec 2015, as against Jul-Sep 2015.

Lavelle Road

3%

10%

4%

Kengeri

4%

8%

5%

Rajaji Nagar
Jalahalli (West)

Oversupply of residential inventory in Vidyaranyapura

and Hebbal led to a slight price correction and average
capital rates here dipped by two to three per cent each.
Developers in Vidyaranyapura slashed property rates due
to stiff competition and limited demand.

7%

7%

8%
Jakkur

11%

The ongoing power shortage in Bangalore also added

to the overall penchant for residential apartments. City
authorities maintain that the ordeal will continue until
2016. Considering this, demand for residential apartments
is anticipated to surge further because of the presence of
power back-up facility.

2%

QoQ change in supply by

Property Type

87%

East Bangalore continued to suffer on the account of

oversupply of residential apartments and the situation
worsened in the second half of 2015. Supply of residential
apartments in the East rose by two per cent and stood at
39 per cent in Oct-Dec 2015. South Bangalore continued to
record the second highest share of apartments in the city.
There was a notable hike in the supply of builder floors
in East Bangalore. This primarily reflects the re-sale
or secondary market, infer experts. Several investors
attempted to exit their investments in Oct-Dec 2015.

Jul-Sep 2015

87%

Oct-Dec 2015

Residential Apartments
Independent Houses/Villas
Builder Floors

Distribution of residential inventory on the basis of varied

budget categories in Bangalore remained unchanged over
the last two quarters. However, industry stalwarts aver
that there is a growing focus on affordable housing (within
Rs 40 lakh). Due to its huge demand, inventory in this
category enjoys the best absorption rates and developers
are increasingly cashing-in on this demand.

6%
22%
6%

22%

14%
13%

QoQ change in supply by

Similar to the previous quarter, the affordable housing

segment garnered around a quarter of the total market
share. East and South Bangalore took the lead and
captured almost three-fourth of the total supply of
affordable homes in Bangalore.

Budget

27%

32%

27%

31%

Jul-Sep 2015

North Bangalore recorded a significant rise in the supply

of properties priced within Rs 40 lakh. Popular localities
such as Hennur, Yelahanka, Hormavu and Thanisandra had
maximum homes on sale under this price range.

East and South Bangalore topped the share of mid-income

housing inventory priced within Rs 40-60 lakh.

There was a marginal rise in the supply of luxury-housing

(Rs 1-2 crore) in the current quarter.

Sahakara
Nagar
*Rental values represent yearly change

2%

11%

6%

Hennur

Bangalore home buyers continued to prefer residential

apartments over other property types independent
houses/villas and builder floors. Comparative affordability,
value for money and availability of amenities kept demand
and supply of residential apartments robust.

Availability of Property by Budget

Top Performers in North, West and Central Bangalore

(Rental Values)

While RT Nagar, RMV Extension and Rajaji Nagar were the

most coveted localities in their respective zones, there
were no new projects coming up due to paucity of land
parcels. This resulted in the prices of existing properties to
surge by five to seven per cent in the current quarter.

99acres Insite

Supply Analysis

Oct-Dec 2015

Property in this budget segment garnered traction

primarily from Non-Resident Indians (NRIs) and HighNetworth Individuals (HNIs).

Availability of luxury housing spiked up specifically in

South Bangalore. Localities such as Kanakapura Road,
Bannerghatta Road and Electronic City recorded maximum
supply of the same.

Buyers continued to prefer ready projects in order to

avoid inordinate delays, a common pitfall associated
with under-construction projects.

Out of the total ready-to-move-in properties, majority

fell in the mid-income (Rs 40-60 lakh) and highincome (Rs 60 lakh Rs 1 crore) brackets, which are
also the most absorbed categories.

Oct-Dec 2015

% Change

Banashankari

6400

Banaswadi

5000

Bannerghatta Road

Tumkur Road

5350

-5

Whitefield

4500

-2

4600

-3

Yelahanka

4800

Brookefield

5100

-4

Yeshwanthpur

7950

Cox Town

7000

-3

CV Raman Nagar

4600

-4

Devanahalli

5400

Oct-Dec 2015

% Change

Electronic City

3800

-1

Banashankari

15

HBR Layout

5300

Bannerghatta Road

14

Hebbal

5700

-3

Begur Road

12

-8

Jul-Sep 2015

Hennur

5450

Bellandur

19

Oct-Dec 2015

Hennur Road

5200

Brookefield

17

Hoskote

3500

BTM Layout

17

Indira Nagar

10100

-2

ITPL

5100

Electronic City

13

-7

Jalahalli

4450

Hebbal

15

Jayanagar

8100

-4

Hennur

16

JP Nagar

4800

-4

Indira Nagar

22

Kanakapura Road

4800

-1

JP Nagar

17

Kengeri

3450

-7

Kanakapura Road

11

-8

Koramangala

9150

-8

Kengeri

11

10

Marathahalli

5350

Lavelle Road

45

Mysore Road

4900

Marathahalli

18

13

Nagarbhavi
Raja Rajeshwari
Nagar

5700

Richmond Town

27

4000

Sarjapur Road

18

Rajaji Nagar

13250

Thanisandra

13

Though more than half of the inventory in the city was

under-construction, the market reflected the developers
mood of completing ongoing projects first.

RMV Extension

8750

Ulsoor

23

RT Nagar

5500

Whitefield

16

While the availability of under-construction projects

dropped by two per cent and stood at 54 per cent in
the current quarter as against Jul-Sep 2015, supply of

Sarjapur

4400

-2

Sarjapur Road

4200

-2

Yelahanka

11

-8

Supply of ultra-luxury housing (Rs 2-5 crore) shifted

from Central Bangalore to the South. With the topmanagement of IT companies buying majority of these
homes, preference moved towards developed localities in
South Bangalore. JP Nagar and Jayanagar, which are also
approachable via the metro, recorded maximum supply
of homes priced between Rs 2-5 crore.

7%

More than half of the properties in the ultra-luxury

budget segment in South Bangalore were available
as builder floor units.

7%

40%

40%

3%
3%

QoQ change in supply by

50%

(BHK)

Supply of various configurations 1BHK, 2BHK, 3BHK

and 4BHK has remained unchanged in Bangalore since
Apr-Jun 2015.
Being an end-user driven market, the city continued to
garner maximum interest and thus, supply of 2BHK units.
The category captured half of the total market share in
Oct-Dec 2015.
Majority of the 2BHK units (40 per cent) fell in the midincome segment (Rs 40-60 lakh), followed by the affordable
segment (within Rs 40 lakh).

1BHK
2BHK
3BHK
4BHK

North Bangalore recorded an increased availability of 2BHK

units this quarter. Experts attribute this to the increase in
housing demand from the workforce of start-ups operating
in the area.
With an average size of 1500-1800 sq ft, 3BHK units made
up 40 per cent of the total market share. Majority of the
3BHK units were residential apartments.

54%

Oct-Dec 2015

46%

Out of the total properties in Central Bangalore, almost

half were configured as 3BHK units, most of which were
priced beyond Rs 2 crore (ultra-luxury housing), followed
by Rs 1-2 crore (luxury housing).
While 4BHK units captured one-tenth of the total market
share, they were mostly concentrated in East Bangalore.

56%

Locality

CAPITAL VALUES

% Change

Ready to move vs Under-construction

CAPITAL VALUES

Oct-Dec 2015

BHK-wise Distribution of Property

ANNEXURES

ready-to-move-in inventory swelled up by the same

percentage and stood at 46 per cent.

99acres Insite

10

Jul-Sep 2015

44%

50%

Locality

RENTAL VALUES

Locality

*All prices are per sq ft rates

*Capital values represent quarterly change
*Rental values represent yearly change

11

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